September 26, 2018 – The Court hearing the Orianna Health Systems case issued an order partially granting and partially denying the motion of creditor OHI Asset RO requesting authority to credit bid up to $300 million in any asset sale carried out by the Debtors [Docket No. 1006]. The order states, “The Omega Entities may only submit a credit bid in compliance with the Order Approving (A) Plan Funding Commitment and Stock Purchase Agreement with Plan Sponsor, (B) Stalking Horse Bid Protections, (C) Bidding and Auction Procedures Governing Submission and Consideration of Competing Plan Sponsorship Proposals, and (D) the Form and Manner of Notice Thereof [Docket No. 377]. For the reasons set forth on the record in the Court’s oral ruling on September 19, 2018, all other relief requested in the Motion is DENIED.” The order referenced above includes the following language in respect of the Omega Entities, “Subject to the terms in the RSA, Omega is a Qualified Bidder and hereby maintains the right to credit bid in an amount sufficient to be the Back-Up Bid or the back-up to the Back-Up Bid, provided however, that such credit bid shall, to the extent necessary, include a cash component necessary to fund all cash payments in the Plan.” The transcript of this hearing is not yet publicly available.

As previously reported [Docket No. 821], “On the assumption that the Debtors still plan to file a Sale Motion, the Omega Entities hereby request entry of an order confirming their right to credit-bid….For purposes of their ability to credit-bid in connection with any Sale Motion filed by the Debtors, it would be sufficient for the Omega Entities to be permitted to credit bid up to $275,000,000 (if needed depending on the consideration offered in any sale motion or related auction convened by the Debtors), plus, as applicable, the $25,000,000 balance of the DIP Facility, for a total of $300,000,000…. As presented in the Omega Proof of Claim, the Omega Entities assert their prepetition claims in the aggregate amount of approximately $423,000,000.”

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